Fed Policy Procedures: Historical Perspective
1) A borrowed reserves target is ________ because increases in income ________ interest rates and discount loans, causing the Fed to ________ the monetary base, everything else held constant.
A) procyclical; increase; increase
B) countercyclical; increase; increase
C) procyclical; reduce; reduce
D) countercyclical; reduce; reduce
2) Fed policy since the early 1990s indicates that it is pursuing a policy of targeting the
A) monetary base.
B) money supply.
C) federal funds interest rate.
D) exchange rate.
3) Since the early 1990s, the Fed has conducted monetary policy by setting a target for the
A) level of borrowed reserves.
B) monetary base.
C) federal funds rate.
D) inflation rate.